U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB/A
Amendment No. 3
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUER
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
BECK & CO.
(Name of Small Business Issuer in its charter)
Nevada 88-0390828
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
1273 West Glengyle Court, Murray, UT 84123
(Address of Principal Executive Offices and Zip Code)
Issuer's Telephone Number: (801) 270-5867
Securities to be registered under Section 12(b) of the Act:
Securities to be registered under Section 12(g) of the Act:
Common Stock, Par Value $0.001
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TABLE OF CONTENTS
ITEM NUMBER AND CAPTION Page
1. Description of Business 3
2. Management's Discussion and Analysis or Plan of 4
Operations
3. Description of Properties 5
4. Security Ownership of Certain Beneficial Owners and 5
Management
5. Directors, Executive Officers, Promoters and Control 6
Persons
6. Executive Compensation 7
7. Certain Relationships and Related Transactions 7
8. Legal Proceedings 7
9. Market for Common Equity and Related Stockholder 7
Matters
10. Recent Sales of Unregistered Securities 7
11. Description of Securities 8
12. Indemnification of Directors and Officers 9
13. Financial Statements 10
14. Changes in and Disagreements with Accountants on 10
Accounting and Financial Disclosure
15. Financial Statements and Exhibits 10
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ITEM 1. DESCRIPTION OF BUSINESS
History
The Company was formed as a Nevada corporation on April 14, 1998,
for the purpose of operating as a specialty jewelry retailer.
Immediately following organization of the Company, it issued
1,000,000 shares of its common stock to its officer and director,
Larry L. Beck for services rendered to the Company. In April
1998, the Company completed a private offering of 500,000 shares
of its common stock as a sales price of $0.001 per share or an
aggregate offering of $500. These shares were issued 100,000
shares to Valerie King, 200,000 shares to James Evans, and
200,000 shares to Douglas Madden. In April 1999, the Company
completed a private offering of 21,750 shares of its common stock
at a sales price of $1.00 per share or an aggregate offering of
$21,750. Pursuant to this offering, the Company sold 7,000
shares to two individuals in June 1998 and 14,750 shares to 25
individuals in March 1999.
General
The Company was organized to operate as a specialty retailer of
fine jewelry. To date, the Company has sold a limited quantity
of jewelry through direct-mail and word of mouth advertising. In
August 1999, the Company established a retail jewelry presence on
the internet located at www.e-tailjewelry.com. Management
intends to focus its resources on developing a dynamic e-commerce
Internet presence marketing fine jewelry. Additionally, the
Company plans on establishing specialty outlets in small rural
communities nationwide, where it can achieve local market
dominance. The Company will offer an in-depth selection of fine
jewelry and precious and semi-precious gemstones including
diamonds, gold, precious and semi-precious jewelry.
The Company plans on opening from 500-800 square foot retail
stores in rural communities that convey a pleasant and inviting
ambiance. With its retail stores operating in small rural
communities, the Company believes that it will not have to
contend with the substantial number of competitors located in
larger cities and will benefit from word of mouth advertising.
In the event the Company is able to find attractive jewelry
retail opportunities in larger cities, the Company may also
utilize its available resources to exploit such opportunities.
Store concepts are expected to be designed around a natural or
`new age' theme. As such, special attention will be given to
lighting, colors and background music. The use of several cases
will allow the Company's customers to have a partial look at
merchandise, allowing a well planned sales presentation to
commence.
To date, the Company has identified several potential store
locations in Elko, Nevada and Salt Lake City, Utah. It is
estimated that each store would require approximately $100,000 to
open, which includes leasehold improvements, inventory,
personnel, legal, marketing and security. The Company would
expect to limit its initial capital outlays by seeking to acquire
existing stores though seller financing.
Currently, the Company has very little capital to exploit these
retail store opportunities. While the Company expects to raise
additional funds in the future, there currently are no immediate
plans to do so and no assurances that it will be successful in
raising additional capital in the future. Accordingly, the
Company has decided to focus time and resources to developing its
Internet presence for the sale of fine jewelry until such time as
the Company has the resources to acquire or open its first retail
store.
The Company's Internet site went online to the public in
August 1999 at www.e-tailjewelry.com, and is fully operational.
Through its Internet site, customers are able to scroll through a
number of photographs and identify appealing jewelry products.
The customer is able to enter information regarding sizes and
colors and the ability to purchase the products directly online.
The Internet site has the capability to accept Visa, MasterCard,
American Express and Discover credit cards online, and provide the
customer with a printable order form or telephone their order
directly to the Company.
By utilizing the Internet, the Company is able to substantially
minimize its costs while having the opportunity to generate
sales. The Company is currently operating from the home of its
President. It is estimated that minimum operating expenses are
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approximately $1,000 per month, including the costs of an
Internet service provider, web development, phone, fax, postage,
printing, packaging, legal and minimum marketing through word of
mouth, search engines, discussion groups, chat rooms and
classified advertising.
The Company expects that it will periodically modify the web
site to expand and modify product offerings. Web site changes
may also be made to improve efficiency and ease of customer use.
The Company uses, as needed, the services of an unrelated web
site development and design firm based in Salt Lake City, UT to
modify and improve its web site from time to time.
As is the case with nearly all web sites, the Company's web site
may, from time to time, experience periods of inaccessibility due
to technical problems with the Internet service provider. The
Company's Internet service provider is Big Planet located in Salt
Lake City, UT. The Company believes its Internet service
provider has adequate bandwidth and technology to manage the
Company's operations for the foreseeable future.
To date, the Company's only source of marketing has been through
small direct mailings and word of mouth. To further market the
Company's Internet operations, it intends on utilizing search
engines, discussion groups, chat rooms, banner advertising and
print classified advertising in magazines and newspapers. The
Company anticipates as resources become available, to expand its
advertising to include radio and cable television. The marketing
for its specialty retail stores is expected to be through the use
of direct mail, billboard, radio and television advertising.
The Company does not manufacture its merchandise. It anticipates
purchasing substantially its entire inventory directly from third
party manufacturers and cutters located in the United States and
abroad. Currently, the Company does not have any contractual
agreements with vendors for its merchandise. The Company is
working with approximately five different suppliers for its
jewelry products who require payment for orders upon delivery or
within 30 days and is on a transaction by transaction basis.
Eventually, the Company anticipates the use of formal supplier
contracts as order sizes increase. The Company anticipates that
vendors will commit merchandise on a consignment basis,
eliminating the need to purchase inventory until it is sold. The
Company also anticipates having arrangements with subcontractors
to finish and set stones in order to keep costs down.
The Company does not currently have sophisticated inventory
control systems due to its limited inventory. Inventory control
systems currently in use are off the shelf software programs.
The Company anticipates that it will utilize a centrally managed
inventory control system in the future as inventory will be
maintained at multiple locations. The computer systems will also
assist in direct mailings, and facilitate future add on sales by
customers. The Company will maintain a database of its customers
buying habits, birthdays, anniversaries and other special
occasions and be able to direct target-mailing offerings add on
merchandise.
Products are shipped by the Company or directly from the
manufacturer at no charge to the customer for standard delivery service
by US Postal service or UPS. The Company does charge the customer for
overnight or 2-day delivery service throught the US Postal service, UPS
DHL or Federal Express. It is the Company's practice to insure
shipments against loss, theft or damage, in the full amount of each
order. In the Company's experience, it takes approximately seven
working days from date of order for the product to be delivered by
standard delivery. Returns are accepted by the Company if made within
seven days after receipt by the customer.
Governmental Regulation
There is no significant government regulation of the Company's
operations.
Competition
The Company will be involved in intense competition with other
local jewelry outlets as well as mail order companies and other
Internet sites. Such competing companies have lengthier
experience as jewelry retailers, along with greater financial and
other resources than the Company. Additionally, the Company will
compete, to a limited extent, with out of state jewelry outlets
to the extent that customers choose to purchase products in
larger cities. There is no assurance that the Company will be
able to respond to competitive pressures.
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Employees
The Company is a development stage company and currently has no
employees, except its executive officers. Management of the
Company expects to use consultants, attorneys, and accountants as
necessary. The need for full-time employees and their
availability will be determined on an as needed basis.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS
Results of Operations
Quarterly Periods Ended September 30, 1999 and 1998.
The Company had net sales of $6,578 and $1,156 in the three
months ended September 30, 1999 and 1998, respectively. Cost
of Sales was $4,736 during the three-month period ended September
30, 1999 and $793 for the three months ended September 30, 1998.
Operating expenses in the three months ended September 30, 1999
and 1998, consisted of general corporate administration, legal
and professional expenses, advertising, salaries, and accounting
and auditing costs. These expenses were $12,916 for the three
months ended September 30, 1999 and $14,813 for the three months
ended September 30, 1998.
As a result of the foregoing factors, the Company realized a net
loss of $11,136 for the three months ended September 30, 1999,
and a net loss of $14,450 for the three months ended September
30, 1998. Management expects losses will continue unless and
until the Company's Internet site generates sufficient additional
sales to offset operating expenses.
Year Ended June 30, 1999
The Company was formed on April 14, 1998, so management does not
believe a comparison of the period from inception to June 30,
1998 and the year ended June 30, 1999 is meaningful.
For the year ended June 30, 1999, the Company had net sales of
$34,673. Cost of Sales was $29,801, resulting in a gross margin
of $4,872. Sales are attributable primarily to word of mouth and
direct mail advertising, prior to the Company's Internet site
becoming available in August 1999. Management expects net sales
to increase in fiscal year 2000 as the Internet site becomes
established.
Operating expenses during the year ended June 30, 1999, in the
amount of $56,142 consisted of general corporate administration,
legal and professional expenses, advertising, salaries, and
accounting and auditing costs. Advertising and office expense
were substantially higher in 1999 because expenses were incurred
in connection with the development of the Company's jewelry
business and the Internet site that became operational in August
1999. Legal expenses were substantially higher in 1999 because
of the costs associated with the Company's filing to become a
reporting company under the Securities Exchange Act of 1934.
As a result of the foregoing factors, the Company realized a net
loss of $51,332 for the year ended June 30, 1999. Management
expects losses will continue unless and until the Company's
Internet site generates sufficient additional sales to offset
operating expenses.
Liquidity and Capital Resources
At September 30, 1999, the Company had a working capital
deficit of $5,737 as compared to working capital of $6,209 at
June 30, 1999. The working capital deficit resulted primarily
from accrued salaries payable to the Company's president, Larry
Beck, which he has elected to defer until such time as the
Company has sufficient cash flow from operations to pay the
salaries and cover other expenses of operation. The Company's
capital was obtained from loans totaling $2,500 to the Company
from Park Street Investments, a stockholder of the Company, and
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sale of 21,750 shares of common stock resulting in gross proceeds
to the Company of $21,750. This sale was conducted pursuant to a
private offering by the Company completed in March 1999. The
Company intends to apply its available capital to paying
administrative costs and marketing the Company's jewelry products
through its website. Since the president of the Company has
agreed to defer payment of his salary until such time as cash
flow can cover the salary and operating expenses, the Company
estimates that its available capital funds genrated from product
sales will cover the Company's operating expenses for the
remainder of the fiscal year ending June 30, 2000, after which
the Company intends to rely on revenue generated from sale of its
jewelry products to fund operations, including the Company's plan
to establish retail locations in rural communities. It is
estimated, that the minimum operating expenses are approximately
$1,000 per month, which include the cost of an Internet service
provider, web development, telephone, fax, postage, printing,
packaging, legal and minimal marketing. If the Company is unable
to generate sufficient revenue to support and expand its
operations, it may need to seek debt or equity financing. The
Company has not identified any potential sources of debt or
equity financing and can not predict whether any such financing
will be available to the Company should it be needed on terms
acceptable to the Company. In addition, the Company's President
and majority shareholder, Larry Beck, has expressed a desire to
utilize personal resources to fund operations. However, there is
no contractual obligation to do so.
ITEM 3. DESCRIPTION OF PROPERTIES
The Company is currently operating from a home office of its
President, Larry Beck, in Sandy, Utah, under a lease that
provides for a monthly lease rate of $100, which was prepaid to
the end of June 1999 through the issuance of common stock of the
Company to Mr. Beck and will be paid after June 1999 only out of
annual cash flow of the Company in excess of $50,000. In the
event Internet operations grow to where the Company is required
to hire employees, the Company will operate its Internet
operations from a future retail specialty store preferably in a
rural community such as Elko, Nevada, where the Company has
identified several potential locations. The Company may also
operate from a retail location in Salt Lake City or Sandy, Utah
if it is able to secure a lease on favorable terms.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth as of November 30, 1999, the
number and percentage of the outstanding shares of common stock
which, according to the information supplied to the Company, were
beneficially owned by (i) each person who is currently a director
of the Company, (ii) each executive officer, (iii) all current
directors and executive officers of the Company as a group and
(iv) each person who, to the knowledge of the Company, is the
beneficial owner of more than 5% of the outstanding common stock.
Except as otherwise indicated, the persons named in the table
have sole voting and dispositive power with respect to all shares
beneficially owned, subject to community property laws where
applicable.
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Common Percent
Shares of
Class
Name and Address
Larry L. Beck (1) 1,000,000 65.7
7865 South Citori Drive
Building B, No. 206
Sandy, UT 84070
James P. Evans (2) 200,000 13.1
P.O. Box 935
Wells, Nevada 89835
Valerie King (2) 100,000 6.6
148 Cascade Drive
Sp. Creek, Nevada 89815
Douglas E. Madden 200,000 13.1
444 Elm street
Elko, Nevada 89801
All Executive officers and Directors 1,000,000 65.7
as a Group (1 person)
(1) Mr. Beck is the sole officer and director of the Company.
(2) These persons are husband and wife, so the shares held
by each may be deemed under the control of both.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS
Directors and Officers
The following table sets forth the names, ages, and positions
with the Company for each of the directors and officers of the
Company.
Name Age Positions (1) Since
Larry L. Beck 46 President, Secretary, 1998
Treasurer and Director
Board of Directors of the corporation shall consist of at least
one (1) but no more than seven (7) persons, who shall be elected
at the annual meeting of the shareholders of the corporation and
who shall hold office for one (1) year or until their successors
are elected and qualify.
The following is information on the business experience of each
director and officer.
Larry L. Beck is the founder of the Company and has served as
President, Secretary, Treasurer and Director since its
incorporation in April 1998. Mr. Beck has over 20 years
experience in various aspects of the retail jewelry business
including purchasing, merchandising, appraising, managing and
restructuring. From March 1996 through December 1997, Mr. Beck
was involved in sales and jewelry appraising for Fortier
Jewelers, a chain of jewelry stores in Utah. From September 1994
through February 1996 Mr. Beck managed the Shane Company, a
wholesale jewelry store in Utah. Mr. Beck helped open the first
store and participated in its growth to over $3,000,000 in sales.
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From April 1993 to September 1994 Mr. Beck was a consultant for
Silverman Retail Consultants, a consulting firm that assisted
distressed retailers in the area of closeouts, bankruptcies,
acquisitions and marketing.
ITEM 6. EXECUTIVE COMPENSATION
The Company's president, Larry Beck, is compensated under an
employemnt agreement dated April 15, 1998, which provides for a
base salary of $3,000 per month that is increased as the annual
revenues of the Company exceed $500,000. Mr. Beck's compensation
through the end of June 1999 was paid by the issuance to him of
common stock of the Company. After June 1999, Mr. Beck's salary
is accrued and payment deferred until the Company's annual net
income equals or exceeds $50,000.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
A stockholder of the Company, Park Street Investments, loaned
$2,500 to the Company on April 1, 1999, to cover operating
expenses. The loan bears interest at the rate of 10% per annum
and is payable in full on March 31, 2000.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings, and to the best of its knowledge, no such
proceedings by or against the Company have been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND OTHER STOCKHOLDER MATTERS
There is no established trading market for the Company's common
stock. The Company has no outstanding options or warrants to
purchase, or securities convertible into, common equity.
Of the 1,521,750 shares of common stock outstanding, 1,500,000
shares ("Control Shares"), are held by officers, directors, and
10% stockholders of the Company, and are subject to restrictions
on resale under Rule 144 promulgated under the Securities Act of
1933. Control Shares may be sold subject to complying with all
of the terms and conditions of Rule 144, except the one-year
holding period which has been satisfied.
Since its inception, no dividends have been paid on the Company's
common stock. The Company intends to retain any earnings for use
in its business activities, so it is not expected that any
dividends on the common stock will be declared and paid in the
foreseeable future.
At May 21, 1999, there were approximately 31 holders of record of
the Company's Common Stock.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
Immediately following organization of the Company in April
1998, it issued 1,000,000 shares of its common stock to its sole
officer and director as compensation and prepayment of office
lease expenses. No underwriter or broker was involved in the
offering, and no commissions were paid on the sale of the shares.
The shares were offered and sold in reliance on the exemption set
forth in Section 4(2) of the Securities Act of 1933.
In connection with for formation of the Company, it issued on
April 14, 1998, 500,000 shares of common stock at a price of
$0.001 per share or a total of $500. The shares were sold in
reliance on Rule 504 of Regulation D promulgated under the
Securities Act of 1933. The offering was completed on or about
June 1, 1998, with all offered shares sold at a gross purchase
price of $500. No underwriter or broker was involved in the
offering, and no commissions were paid on the sale of the shares.
The purchasers of the shares are as follows:
James P. Evans 200,000 shares
Valerie King 100,000 shares
Douglas E. Madden 200,000 shares
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On June 1, 1998, the Company commenced a placement of 100,000
shares of common stock at a price of $1.00 per share in reliance
on Rule 504 of Regulation D promulgated under the Securities Act
of 1933. The offering was completed on or about April 2, 1999,
with 21,750 shares sold at a gross purchase price of $21,750. No
underwriter or broker was involved in the offering, and no
commissions were paid on the sale of the shares. The purchasers
of the shares, the number of shares and the month of sale are as
follows:
John Banas March 1999 500 shares
Gordon E. Beckstead March 1999 500 shares
John Bradley March 1999 500 shares
Stephen Bushansky June 1998 2,000 shares
Bill M. Conrad March 1999 500 shares
John K. Delisa, Jr. March 1999 500 shares
Elvena Inc. June 1998 5,000 shares
Jeffrey Falke March 1999 150 shares
William Falke March 1999 150 shares
Debra Gellar March 1999 1,000 shares
Eugene Gellar March 1999 1,000 shares
Douglas J. and Donna K. Kilmas March 1999 500 shares
Kuno Laren March 1999 500 shares
Michael A. Linsky March 1999 500 shares
John B. Lowy March 1999 200 shares
Debra A. Marsalisi March 1999 500 shares
Fay M. Matsukage March 1999 500 shares
Raymond E. and Tamara D. McElhaney March 1999 500 shares
OMI Trust March 1999 750 shares
Steven and Tracie Pollack March 1999 750 shares
Tracie Pollack March 1999 750 shares
Barry Potter March 1999 500 shares
Stephen Richards March 1999 2,000 shares
Andrew D. Russ March 1999 500 shares
Hal Schoenfeld March 1999 500 shares
Charlie Trench March 1999 500 shares
Michael L. Valo March 1999 500 shares
ITEM 11. DESCRIPTION OF SECURITIES
The Company is authorized to issue 20,000,000 shares of common
stock, par value $0.001 per share, of which 1,521,750 shares are
issued and outstanding. Holders of common stock are entitled to
one vote per share on each matter submitted to a vote at any
meeting of stockholders. Shares of common stock do not carry
cumulative voting rights and, therefore, holders of a majority of
the outstanding shares of common stock will be able to elect the
entire board of directors, and, if they do so, minority
stockholders would not be able to elect any members to the board
of directors. The Company's board of directors has authority,
without action by the Company's stockholders, to issue all or any
portion of the authorized but unissued shares of common stock,
which would reduce the percentage ownership in the Company of its
stockholders and which may dilute the book value of the common
stock. Stockholders of the Company have no pre-emptive rights to
acquire additional shares of common stock. The common stock is
not subject to redemption and carries no subscription or
conversion rights. In the event of liquidation of the Company,
the shares of common stock are entitled to share equally in
corporate assets after satisfaction of all liabilities. Holders
of common stock are entitled to receive such dividends as the
board of directors may from time to time declare out of funds
legally available for the payment of dividends. The Company has
not paid dividends on its common stock and does not anticipate
that it will pay dividends in the foreseeable future.
The Company is authorized to issue 5,000,000 shares of preferred
stock, par value $0.001, none of which are issued and
outstanding. The Company currently has no plans to issue any
preferred stock. The Board of Directors is authorized to
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classify any shares of its authorized but unissued preferred
stock as preferred stock in one or more series. With respect to
each series, the Board of Directors shall determine the number of
shares which shall constitute such series; the rate of dividend,
if any, payable on shares of such series; whether the shares of
such series shall be cumulative, non-cumulative or partially
cumulative as to dividends, and the dates from which any
cumulative dividends are to accumulate; whether the shares of
such series may be redeemed, and, if so, the price or prices at
which and the terms and conditions on which shares of such series
may be redeemed; the amount payable upon shares of such series in
the event of the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company.; the
sinking fund provisions, if any, for the redemption of shares of
such series; the voting rights, if any, of the shares of such
series; the terms and conditions, if any, on which shares of such
series may be converted into shares of capital stock of the
Company of any other class or series; whether the shares of such
series are to be preferred over shares of capital stock of the
Company of any other class or series as to dividends, or upon the
voluntary or involuntary dissolution, liquidation, or winding up
of the affairs of the Company, or otherwise; and any other
characteristics, preferences, limitations, rights, privileges,
immunities or terms not inconsistent with the provisions of the
Articles of Incorporation. The availability of preferred stock,
while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect
of discouraging takeover proposals, and the issuance of preferred
stock could have the effect of delaying or preventing a change in
control of the Company not approved by the Board of Directors.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.751 of the Nevada Revised Statutes provides in
relevant part as follows:
(1) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending,
or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative except an action by or
in the right of the corporation, by reason of the fact that he is
or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other
enterprise, against expenses, including attorneys' fees,
judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit,
or proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit, or proceeding by
judgment, order, settlement, conviction, or on a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and that, with respect to
any criminal action or proceeding, he had reasonable cause to
believe that his conduct was unlawful.
(2) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending,
or completed action or suit by or in the right of the corporation
to procure a judgment in its favor by reason of the fact that he
is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other
enterprise against expenses, including amounts paid in settlement
and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit
if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue, or matter
as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the court in which
such action or suit was brought shall determine on application
that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall
deem proper.
(3) To the extent that a director, officer, employee, or agent
of a corporation has been successful on the merits or otherwise
in defense of any action, suit, or proceeding referred to in
subsections 1 and 2, or in defense of any claim, issue, or matter
therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in
connection therewith.
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The Company's articles of incorporation provide that no director
or officer of the Company shall be personally liable to the
Company to the extent provided in the Nevada Revised Statutes.
The Nevada Revised Statutes provide that no officer or director
of a corporation shall be personally liable to the corporation or
any of its stockholders for damages for breach of fiduciary duty
as a director or officer involving any act or omission of any
such officer or director, except for acts or omissions involving
intentional misconduct, fraud or a knowing violation of law, or
the payments of dividends in violation of Section 78.300 of the
Nevada Revised Statutes.
ITEM 13. FINANCIAL STATEMENTS
The financial statements of the Company appear at the end of
this report beginning with the Index to Financial Statements on
page F-1.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in or disagreements with accountants
since the Company's organization.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
See the Indices to Financial Statements at pages F-1 and F-6.
Exhibits
Copies of the following documents are included as exhibits to
this report pursuant to Item 601 of Regulation S-B.
Exhibit SEC Ref. Title of Document Location
No. No.
1 (2) Articles of Incorporation, as amended(1) Fm 10-SB
Page E-1
2 (2) By-Laws (1) Fm 10-SB
Page E-3
3 (3) Specimen of Common Stock Certificate Am. No.1
Page E-1
4 (10) Employment Agreement with Larry Beck Am. No.2
Page E-1
5 (10) Lease Agreement Am. No.2
Page E-5
6 N/A Financial Data Schedules (2)
(1) These exhibits are incorporated herein by this reference to
the Registration Statement on Form 10-SB filed with the
Securities and Exchange Commission on July 6, 1999, the first
amendment thereto filed September 7, 1999, and the second amendment
thereto filed January 18, 2000. References to "FM 10- SB" are to
the initial filing, and references to "Am No. 1" and "Am.No.2" are
to the first and second amendments, respectively.
(2) The Financial Data Schedule is presented only in the
electronic filing with the Securities and Exchange
Commission made under Amendment No. 2 to this Registration statement
on January 18, 2000.
11
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the registrant caused this registration statement to be
signed on its behalf by the undersigned thereunto duly
authorized.
BECK & CO.
Date: February 10, 2000 By: /s/ Larry L. Beck, President
In accordance with the Exchange Act, this registration statement
has been signed by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Dated: February 10, 2000 /s/ Larry L. Beck, Director
12
<PAGE>
BECK & CO.
(A Development Stage Company)
FINANCIAL STATEMENTS
September 30, 1999
Balance Sheets - September 30, 1999 (unaudited) F-2
And June 30, 1999
Statements of Operations - Three Months
Ended September 30, 1999 and 1998, and
Inception to September 30, 1999 (unaudited) F-3
Statements of Cash Flows - Three Months
Ended September 30, 1999 and 1998,
and Inception to September 30, 1999(unaudited) F-4
Notes to Consolidated Financial Statements F-5
F-1
<PAGE>
BECK & CO.
(A Development Stage Company)
Balance Sheets
ASSETS
September 30, June 30,
1999 1999
(Unaudited)
CURRENT ASSETS
Cash $ 7,585 $ 10,191
Inventory 2,604 2,277
Total Current Assets 10,189 12,468
FIXED ASSETS
Furniture and equipment - net 3,137 2,327
Total Fixed Assets 3,137 2,327
TOTAL ASSETS $ 13,326 $ 14,795
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable - related party $ 1,746 $ 1,746
Allowance for bad debt and returns 2,256 1,951
Note payable - related party 2,500 2,500
Accrued interest - related par ty 124 62
Accrued salaries 9,300 -
Total Current Liabilities 15,926 6,259
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value: 5,000,000
shares authorized;-0- and -0- shares issued and
outstanding, respectively - -
Common stock, $0.001 par value: 20,000,000
shares authorized; 1,521,750 shares issued and
outstanding 1,522 1,522
Additional paid-in capital 66,678 66,678
Deficit accumulated during the development stage (70,800) (59,664)
Total Stockholders' Equity (Deficit) (2,600) 8,536
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 13,326 $ 14,795
The accompanying notes are an integral part of these financial
statements.
F-2
BECK & CO.
(A Development Stage Company)
Statements of Operations
(Unaudited)
From
Inception on
For the April 14,
Three Months Ended 1998 Through
September 30, September 30,
1999 1998 1999
NET SALES $ 6,578 $ 1,156 $ 45,052
COST OF SALES 4,736 793 37,284
GROSS PROFIT 1,842 363 7,768
EXPENSES
General and administrative 3,453 5,596 23,334
Bad debt and return expense 305 217 2,256
Depreciation expense 158 - 354
Officer's salary 9,000 9,000 52,500
Total Expenses 12,916 14,813 78,444
OTHER (EXPENSES)
Interest expense (62) - (124)
Total Other (Expenses) (62) - (124)
NET LOSS $ (11,136) $ (14,450) $ (70,800)
BASIC (LOSS) PER SHARE $ (0.01) $ (0.01)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 1,521,750 1,507,000
The accompanying notes are an integral part of these financial
statements.
F-3
<PAGE>
BECK & CO.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From
Inception on
For the April 14,
Three Months Ended 1998 Through
September 30, September 30,
1999 1998 1999
CASH FLOWS FROM OPERATING
ACTIVITIES
Net (loss) $(11,136) $(14,450) $ (70,800)
Adjustments to reconcile net loss to net
cash used by operating activities:
Common stock issued for services - - 45,950
Increase allowance for bad debt and
returns 305 - 2,256
Depreciation expense 158 - 354
Increase in accounts payable and accrued
expenses 9,362 9,444 13,670
(Increase) in inventories (327) (722) (2,604)
Net Cash (Used) Provided by Operating
Activities (1,638) (5,728) (11,174)
CASH FLOWS FROM INVESTING
ACTIVITIES
Furniture and equipment (968) - (3,491)
Net Cash Used by Investing Activities (968) - (3,491)
CASH FLOWS FROM FINANCING
ACTIVITIES
Common stock issued for cash - - 22,250
Net Cash Provided by Financing
Activities - - 22,250
NET INCREASE (DECREASE) IN CASH (2,606) (5,728) 7,585
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 10,191 9,525 -
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 7,585 $ 3,797 $ 7,585
CASH PAID DURING THE YEAR FOR:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
BECK & CO.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 1999 and June 30, 1999
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared
by the Company without audit. In the opinion of
management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows
at September 30, 1999 and 1998 and for all periods
presented have been made.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance
with generally accepted accounting principles have been
condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction
with the financial statements and notes thereto included
in the Company's June 30, 1999 audited financial
statements. The results of operations for periods ended
September 30, 1999 and 1998 are not necessarily
indicative of the operating results for the full years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using
generally accepted accounting principles applicable to a
going concern which contemplates the realization of
assets and liquidation of liabilities in the normal
course of business. However, the Company does not have
significant cash or other material assets, nor does it
have an established source of revenues sufficient to
cover its operating costs and to allow it to continue as
a going concern. The Company's President has, therefore,
committed to meeting its minimal operating expenses for a
period of at least 12 months.
F-5
<PAGE>
BECK & CO.
(A Development Stage Company)
FINANCIAL STATEMENTS
June 30, 1999 and 1998
Independent Auditors' Report F-7
Balance Sheet - June 30, 1999 F-8
Statements of Operations - Year
Ended June 30, 1999, Inception to
June 30, 1998, and F-9
Inception to June 30, 1999
Statements of Stockholders' Equity - Year
Ended June 30, 1999, Inception to
June 30, 1998, and F-10
Inception to June 30, 1999
Statements of Cash Flows - Year
Ended June 30, 1999, Inception to
June 30, 1998, and F-11
Inception to June 30, 1999
Notes to Consolidated Financial F-12
Statements
F-6
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Beck & Co.
(A Development Stage Company)
Sandy, Utah
We have audited the accompanying balance sheet of Beck & Co. (a
development stage company) as of June 30, 1999 and the related
statements of operations, stockholders' equity and cash flows
for the year ended June 30, 1999, from inception on April 14, 1998
through June 30, 1998 and from inception on April 14, 1998 through
June 30, 1999. These financial statements are the responsibility
of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Beck & Co. (a development stage company) as of June 30, 1999
and the results of its operations and its cash flows for the
year ended June 30, 1999, from inception on April 14, 1998 through
June 30, 1998, and from inception on April 14, 1998 through June 30,
1999 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note 3 to the financial statements, the Company is a
development stage company with no significant operating results
to date, which raises substantial doubt about its ability to
continue as a going concern. Management's plans in regard to
these matters are also described in Note 3. The financial
statements do not include any adjustments that might result from
the outcome of the uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
November 22, 1999
F-7
<PAGE>
BECK & CO.
(A Development Stage Company)
Balance Sheet
ASSETS
June 30,
1999
CURRENT ASSETS
Cash $ 10,191
Inventory 2,277
Total Current Assets 12,468
FIXED ASSETS
Furniture and equipment - net (Note 6) 2,327
Total Fixed Assets 2,327
TOTAL ASSETS $ 14,795
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - related party (Note 4) $ 1,746
Allowance for bad debt and returns (Note 2) 1,951
Note payable - related party (Note 5) 2,500
Accrued interest 62
Total Current Liabilities 6,259
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value:
5,000,000 shares authorized; -0-
shares issued and outstanding -
Common stock, $0.001 par value: 20,000,000
shares authorized; 1,521,750 shares issued
and outstanding 1,522
Additional paid-in capital 66,678
Deficit accumulated during the development stage (59,664)
Total Stockholders' Equity 8,536
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 14,795
The accompanying notes are an integral part of these financial statements.
F-8
<PAGE>
BECK & CO.
(A Development Stage Company)
Statements of Operations
For the
Year From Inception on
Ended April 14, 1998 Through
June 30, June 30,
1999 1998 1999
NET SALES $ 34,673 $ 3,801 $ 38,474
COST OF SALES 29,801 2,747 32,548
GROSS MARGIN 4,872 1,054 5,926
EXPENSES
General and administrative 18,214 1,669 19,883
Bad debt and return expense 1,734 217 1,951
Depreciation expense 194 - 194
Officer's salary 36,000 7,500 43,500
Total Expenses 56,142 9,386 65,528
LOSS FROM OPERATIONS (51,270) (8,332) (59,602)
OTHER (EXPENSES)
Interest expense (62) - (62)
Total Other (Expenses) (62) - (62)
NET LOSS $(51,332) $ (8,332) $(59,664)
BASIC (LOSS) PER SHARE $ (0.03) $ (0.00)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 1,510,677 1,496,143
The accompanying notes are an integral part of these financial statements.
F-9
<PAGE>
BECK & COMPANY
(A Development Stage Company)
Statements of Stockholders' Equity
From Inception on April 14, 1998 Through June 30, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-In Subscription Development
Shares Amount Capital Receivable Stage
<S> <C> <C> <C> <C> <C>
Balance at inception on
April 14, 1998 - $ - $ - $ - $ -
Issuance of common stock
for services at $0.045 per share 1,000,000 1,000 44,950 (37,200) -
Issuance of common stock
for cash at $0.001 per share 500,000 500 - - -
Issuance of common stock
for cash at $1.00 per share 7,000 7 6,993 - -
Net loss from inception on
April 14, 1998 through
June 30, 1998 - - - - (8,332)
Balance, June 30, 1998 1,507,000 1,507 51,943 (37,200) (8,332)
Issuance of common stock
for cash at $1.00 per share 14,750 15 14,735 - -
Receipt of stock subscription - - - 37,200 -
Net loss for the year ended
June 30, 1999 - - - - (51,332)
Balance, June 30, 1999 1,521,750 $ 1,522 $ 66,678 $ - $ (59,664)
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-10
<PAGE>
BECK & CO.
(A Development Stage Company)
Statements of Cash Flows
For the
Year From Inception on
Ended April 14, 1998 Through
June 30, June 30,
1999 1998 1999
CASH FLOWS FROM OPERATING
ACTIVITIES
Net (loss) $ (51,332) $ (8,332) $(59,664)
Adjustments to reconcile net loss to net
cash used by operating activities:
Common stock issued for services 37,200 8,750 45,950
Increase allowance for bad debt and
returns 1,734 217 1,951
Depreciation expense 194 - 194
Changes in operating assets and liabilities:
Increase in accounts payable and accrued
expenses 2,819 1,489 4,308
(Increase) in inventories (2,178) (99) (2,277)
Net Cash (Used) Provided by Operating
Activities (11,563) 2,025 (9,538)
CASH FLOWS FROM INVESTING
ACTIVITIES
Furniture and equipment (2,521) - (2,521)
Net Cash Used by Investing Activities (2,521) - (2,521)
CASH FLOWS FROM FINANCING
ACTIVITIES
Common stock issued for cash 14,750 7,500 22,250
Net Cash Provided by Financing
Activities 14,750 7,500 22,250
NET INCREASE (DECREASE) IN CASH 666 9,525 10,191
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 9,525 - -
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 10,191 $ 9,525 $ 10,191
CASH PAID DURING THE YEAR FOR:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
F-11
<PAGE>
BECK & CO.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1999 and 1998
NOTE 1 - NATURE OF ORGANIZATION
The financial statements presented are those of Beck &
Co. (the Company). The Company was organized under the
laws of the State of Nevada on April 14, 1998. The
Company was organized for the purpose of offering mail
order and Internet retail jewelry sales.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The financial statements are prepared using the accrual
method of accounting.
b. Provision for Taxes
At June 30, 1999, the company has net operating loss
carryforwards of approximately $60,000 that may be offset
against future taxable income through 2015. No tax
benefit has been reported in the financial statements
because the Company believes there is a greater than 50%
chance the carryforwards will expire unused.
Accordingly, the potential tax benefits of the loss
carryforwards are offset by a valuation allowance of the
same amount.
c. Use of Estimates
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts
of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
d. Cash and Cash Equivalents
The Company considers all highly liquid investment with a
maturity of three months or less when purchased to be
cash equivalents.
e. Basic Loss Per Share
The computation of basic loss per share of common stock
is based on the weighted average number of shares
outstanding during the period of the financial
statements.
F-12
<PAGE>
BECK & CO.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1999 and 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f. Revenue Recognition
Revenue is recognized upon shipment of goods to the
customer. The Company ships the products to the customer
by overnight courier. The Company normally pays postage
which is charged to cost of goods at time the order is
shipped. Orders will sometimes carry insurance in case
of loss, theft or damage - depending on individual needs.
Orders should be received by the customer within seven
working days from date of order. Returns are acceptable
within seven days after receipt without charge. Custom
pieces and platinum items will require a 15% re-stocking
fee. Depending on the size, product ordered, and whether
the order is standard or custom, the Company will either
have the product shipped directly from the manufacturer
or wholesaler, or the Company will ship the product from
the Company's offices.
In circumstances where the Company sells products on
consignment, or where product is drop shipped, the
Company only recognizes its markup or commission as
revenue. In circumstances where the Company purchases
the product and holds it as inventory, the Company
recognizes revenue on the sales price.
Currently, the Company has not experienced any returns or
bad debts and, therefore, cannot accurately predict the
amounts it will experience. Internet commerce is a new
area for all companies, and, therefore, industry
standards are not clearly defined. The Company is,
therefore, charging 5% against revenues as an allowance
for returns and bad debt which it believes is typical of
companies in the retail jewelry business.
g. Inventory
Inventory consists of finished goods valued at the lower
of cost or fair market value, accounted for on a first-in-
first-out basis.
h. Paid-in Capital
The Company recorded $45,950 for the issuance of
1,000,000 shares which were issued to the President in
April 1998. This represents fair market value of the
services performed by the President from inception
through June 30, 1999. Services from inception through
June 30, 1998 of $8,750 include incorporation expenses of
$1,000, 2.5 months of salary at $3,000 per month and 2.5
months of use of office space at $100 per month.
Services from July 1, 1998 through June 30, 1999 of
$37,200 include 12 months of salary at $3,000 per month
and 12 months of use of office space at $100 per month.
No other Company expenses have been paid on behalf of the
registrant, its shareholders or other affiliates during
the period presented.
F-13
<PAGE>
BECK & CO.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1999 and 1998
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using
generally accepted accounting principles applicable to a
going concern which contemplates the realization of
assets and liquidation of liabilities in the normal
course of business. However, the Company does not have
significant cash or other material assets, nor does it
have an established source of revenues sufficient to
cover its operating costs and to allow it to continue as
a going concern. The Company's President has, therefore,
committed to meeting its minimal operating expenses for a
period of at least 12 months.
NOTE 4 - ACCOUNTS PAYABLE - RELATED PARTY
As of June 30, 1999 and 1998, the Company owed its
President $1,746 and $1,489, respectively, for product
the President purchased on behalf of the Company using an
personal credit card.
NOTE 5 - NOTE PAYABLE - RELATED PARTY
As of June 30, 1999 and 1998, the Company owed Park
Street Investments $2,500 and $-0-, respectively. The
note is due on March 31, 2000 and accrues interest at 10%
per annum beginning April 1, 1999.
NOTE 6 - PROPERTY AND EQUIPMENT
Furniture and equipment are depreciated at the end of
each period using the straight-lien method of
depreciation. Computer equipment is depreciated over 3
years and furniture and other equipment is depreciated
over 7 years with no salvage value.
Furniture and equipment $ 1,370
Computers 1,151
Less: accumulated depreciation (194)
Total Property and Equipment $ 2,327
Depreciation expense for the year ended June 30, 1999 was
$194.
F-14
